It’s Official: Jeep Will Build Models In China

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Last October we brought you word that Jeep would begin producing models, and perhaps its entire lineup, in China for the Chinese market. Our article (and others) turned into a political hot potato, as some misinterpreted the story to read that Jeep was moving all of its production to China.

That was never the automaker’s intent, but not everyone took the time to read the fine print. China is a significant and growing market for Jeep, so producing vehicles in-country just makes good financial sense (and higher profits) for the automaker.

Now comes word fromThe Car Connectionthat the deal between Chrysler, Fiat and China’s Guangzhou Automobile Group has been signed, and Jeep models will be built under the companies’ joint venture, GAC Fiat Automobiles.

No official production start date was set, but Reuters quotes Fiat head Sergio Marchionne as saying that output could equal 100,000 units in 2014, with an ultimate capacity of 200,000 vehicles per year built in China.

Fiat needs the increased business and profit to counter slumping European sales. In 2012, Jeep more than doubled its previous year sales in China, and most believe that the Chinese market is poised for additional growth in the segment in 2013. In other words, the automaker has no choice but to build Chinese Jeeps in market.

Beginning in 2014, it will build at least one Jeep model in Melfi, Italy, too. Jeep’s upcoming compact offering will be built alongside the Fiat 500X on which its based, with sales planned for both Europe and the United States.

While U.S. Jeep production won’t be moving overseas anytime soon, we still have to wonder if any domestic jobs will be lost when the automaker fires up production in China. The move is clearly for the good of the company, but that won’t be much comfort to workers who lose hours, or even worse, jobs.